Get a Mortgage Pre-Approval
Think you know how much you can afford on a home? An important ingredient in a successful home search is knowing how much you can afford. You don’t want to fall in love with a property only to find out it’s outside your price range and you cannot secure the money to purchase it.
That’s why I recommend getting a Mortgage Pre-Approval prior to beginning your real estate search. This is a document from your bank or other lender stating how much of a mortgage loan they are willing to give you so you can actually purchase the home! There are two advantages to getting this pre-approval:
- It gives you the peace-of-mind of knowing you can afford homes you view on the market, and won’t have problems arranging financing.
- It’s a sign to sellers that you are a serious, prepared buyer – which gives you the edge when making an offer.
You can arrange for a Mortgage Pre-Approval with your bank or other lender such as a credit union or independent mortgage broker. I’m well-connected to many financers, so if you want me to recommend a quality lender please let me know.
It’s good to note that a Pre-Approval is different from a Pre-Qualification you can do on the web.
How Much Home Can You Afford?
Banks and lenders use specific criteria to determine how much of a mortgage loan they’re willing to offer you. They look at your income, expenses, credit history and employment status, as well as the down payment you plan to make on a home and check that against their interest rates and the federal stress test rates. It may seem like a scary process, but it is actually straightforward and you can usually get a Mortgage Pre-Approval in a day. You’ll be glad that you did!
By knowing a firm budget you can confidently shop within that price range knowing you can afford the home you put an offer on. Make sure you ask the lender what your budget would be at your ideal monthly payment price, as well as the max the bank will give you so you know where you can be flexible and by how much.
Have questions about arranging financing? Please submit the form below, call, or email me.